Mayor Mamdani calls for higher taxes on wealthy residents to close $12 billion budget gap

NYC’s newly elected mayor told reporters Wednesday that wealthy residents need to contribute more money through higher taxes as the city struggles with a budget gap exceeding $12 billion left behind by previous leadership.

Mayor Zohran Mamdani spoke to CNBC “Squawk Box” co-anchor Andrew Ross Sorkin during a sit-down at City Hall, where he outlined the financial troubles facing America’s largest city. The mayor described the budget problems as bigger than what New York faced during the Great Recession years ago.

Previous leaders blamed for fiscal crisis

Mamdani, a Democrat who started his term on Jan. 1, ran for office promising to increase taxes on rich New Yorkers. He blamed what he called “gross fiscal mismanagement” for creating the current financial mess. The mayor pointed fingers at both former Mayor Eric Adams and ex-Governor Andrew Cuomo, who lost to Mamdani in last November’s general election, saying their decisions created the budget hole.

The new mayor promised his team would be honest with city residents about money problems that he says officials kept quiet for too long.

City Comptroller Mark Levine released numbers earlier this month showing the budget shortfall will reach $12.6 billion across the next two fiscal years. The city faces a $2.2 billion deficit for fiscal 2026, which runs through June 30, against a total budget of nearly $116 billion. The following year’s gap grows to $10.4 billion.

Mamdani said Wednesday his approach will include cutting wasteful spending alongside raising taxes. He gave one example of the previous administration creating an artificial intelligence chatbot that reports say cost around $600,000 but proved difficult for people to actually use.

“I think the scale of this crisis is one where we have to pursue all of these things,” the mayor said during the interview.

He added that city government must show it cares about both providing good services and running operations efficiently. Every dollar spent needs to serve a real purpose, he explained.

The 34-year-old mayor served in the state assembly before winning the city’s top job. During his campaign last year, he laid out specific tax proposals. He wants to raise the corporate tax rate to 11.5%, which would match what New Jersey charges companies. He also proposed a flat 2% tax on anyone earning more than $1 million annually.

Mamdani shocked many observers by beating Cuomo in the 2025 Democratic mayoral primary. His surprise win and his identification as a democratic socialist worried some business leaders in the city. Several prominent figures in the business community warned his plans to redistribute wealth could hurt the city, which serves as the country’s financial center.

Mayor dismisses fears of wealthy exodus

When Sorkin asked about worries that billionaires, other rich people, and companies might leave the city because of his policies, Mamdani dismissed those concerns.

“Capital flight is always spoken about whenever we talk about the potential of increasing taxes on the wealthy,” he responded.

The mayor noted that New York actually gained millionaire residents after the state raised taxes on wealthy people in 2021. He stressed his revenue plans aim to improve city services for everyone.

Mamdani brought up the cold weather the city was experiencing at the time of the interview, calling it one of the coldest periods in New York City’s weather history. He said the city recovered from difficult times in the past partly because the Sanitation Department had thousands of workers on staff to handle problems.

“That’s only possible when you’re actually investing in public service,” the mayor said, defending his view that higher taxes enable better government operations.

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